Why are Foreign Investors Withdrawing from the Indian Market?
Автор: Charts Library
Загружено: 2025-09-05
Просмотров: 580
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Why are Foreign Investors Withdrawing from the Indian Market?
We discuss why foreign investors (FIIs) are withdrawing money from the Indian market. Over the last few months, FIIs have withdrawn around 1.5 lakh crores from the Indian market. The main reason is that the valuation of the Indian market is high, with Nifty's P/E ratio around 22-30, compared to China's 12-During the lockdown, FIIs were investing heavily in India, but after the lockdown, the market went on a bull run, and now FIIs are selling to get better returns elsewhere. The Indian market has given low returns this year, around 4.5%, compared to the US at 10% and China at 15%. FIIs are looking for fixed returns of 5-6%, which they can get in other markets. The Indian market lacks earning growth, especially in the IT, banking, and small/mid-cap sectors. The government's efforts to boost the market, such as GST reforms, have been met with FIIs selling, causing the market to dip. The key for the Indian market to attract FIIs is to improve earning growth as soon as possible. Domestic investors have been supporting the market by buying when FIIs sell, which has helped maintain market stability. The upcoming GST reforms and potential economic boost could improve earning growth, making the market more attractive to FIIs, but the high valuation may still be a concern.
#ForeignInvestors #IndianMarket #Valuation #EarningGrowth #GSTReform #DomesticInvestors #marketstability
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